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On Monday, Senators Elizabeth Warren, Richard Blumenthal, and Ron Wyden sent a letter to AT&T CEO Randall Stephenson asking questions about the $600,000 in payments the company made to Cohen last year. The senators questioned the appropriateness of AT&T's dealings with Cohen, given "Mr. Cohen's lack of experience and lack of knowledge about tax reform, antitrust issues, and FCC policy," they wrote in the letter. "In particular, AT&T had a significant financial interest in key administration decisions, including whether the Department of Justice would contest the proposed merger with Time Warner, whether the Federal Communications Commission would overturn net neutrality rules, and whether the administration would push a tax plan that gave huge breaks to corporations like AT&T," the senators said in the letter. Reference Link

After T-Mobile (TMUS) and Sprint (S) announced a merger agreement, Morgan Stanley analyst Simon Flannery said that while the $43B in estimated synergies is "impressive," the key question is how likely is it that the companies can gain regulatory approval. On competition, he thinks the deal may contribute to a more benign competitive environment in the near-term and that AT&T (T) and Verizon (VZ) could benefit from market consolidation, though he adds that the new T-Mobile would be a formidable competitor in new areas such as 5G and fixed broadband. Flannery added that the deal will be an overhang on tower and fiber providers, noting that part of their $4B in annual network synergies involves a reduction in tower counts from 110,000 to 85,000 over time. However, the analyst said he would expect much more gear to be deployed on each tower and small cells will still expand to 50,000 from 10,000. Tower operators include American Tower (AMT), Crown Castle (CCI) and SBA Communications (SBAC), which are all lower in pre-market trading.

05/01/18

DBAB

05/01/18NO CHANGETarget $36DBABHold

AT&T multiples at 'historical lows,' says Deutsche Bank

Deutsche Bank analyst Matthew Niknam sees value in shares of AT&T with "multiples at historical lows." Despite lowering his earnings estimates by 1%-2%, the analyst says the stock's "heavily discounted valuation is noteworthy." AT&T currently trades at 9.6 times 2018 earnings estimates, which marks its historical trough, Niknam tells investors in a research note. He believes the 6.1% dividend yield should provide additional downside support. Nonetheless, Niknam lowered his price target for AT&T to $36 from $41 and keeps a Hold rating on the shares.

05/02/18

BRRR

05/02/18NO CHANGETarget $110BRRROutperform

Odds in favor of Time Warner deal closing, says Barrington

Barrington analyst James Goss said he continues to expect the acquisition of Time Warner (TWX) by AT&T (T) to ultimately gain court approval and his Outperform rating in part reflects the significant gap from the AT&T takeout offer. He also sees relatively modest downside risk in the event of the deal being blocked, given the continued fundamental support based on existing Time Warner assets and operations, he tells investors. Goss maintains a $110 price target on Time Warner shares.

05/03/18

RHCO

05/03/18NO CHANGETarget $35RHCOHold

AT&T price target lowered to $35 from $40 at SunTrust

SunTrust analyst Greg Miller lowered his price target on AT&T to $35 and kept his Hold rating, saying the company's Q1 results "highlight the various challenges" that it faces. While churn is improving and pre-paid net subscriber additions growth continues, the analyst sees a shift from Pay-TV to OTT model weighing on revenue and margins in the Entertainment and Internet segments.